Topic 9: Child Maintenance

TOPIC 9: CHILD MAINTENANCE

PRELIMINARY MATTERS

There are two schemes for child maintenance in Australia:

· discretionary scheme: FLA

· formula scheme: CSAA

(1) CHILD MAINTENANCE UNDER PT VII DIV 7 FAMILY LAW ACT 1975

(a) parental duty to maintain children: s s66B, 66C

(b) relationship with the Child Support (Assessment) Act 1989: s 66E

(d) court's power to make an order: s 66G

(e) relevant considerations: ss 66H, 66J, 66K

(f) children aged over 18 years: s 66L

(g) general powers of the court: s 66P

(h) urgent orders: s 66Q

(i) specification in orders: s 66R

(k) cessation of order: ss 66T, 66U, 66V, 66VA

(a) Parental Duty to Maintain Children

· parental liability: s 66C

· three rules: s 66C(2)(a)(b)(c)

· step-parent liability: s 66D

· step-parent criteria: s 66M

Keltie v Keltie and Bradford [2002] FLC 93-106 - step-parent

Tobin v Tobin [1999] FLC 92-848 – foster parent

(b) Relationship with the Child Support (Assessment) Act 1989

· prohibition: s 66E (*except overseas orders etc)

(c) Who May Apply for an Order?

· parents, child, grandparent, 'concerned person': s 66F(1)

· note ‘care’ children: s 66F(2)

· Australian jurisdiction: s 69E

(d) Court’s power to make an order

· may … as it thinks proper: s 66G

· but note s 66P

(e) Relevant Considerations

· approach: s 66H (needs and means analysis)

W and W [1980] FLC 90-872

Tuck and Tuck [1981] FLC 91-021

Mee and Ferguson [1986] FLC 91-716

Ganter v Grimshaw [1998] FLC 92-810

· need factors: s 66J

Specific factors

Lovering Basket of Goods Approach (1983)

Lee Expenditure Survey Approach (1989)

Coon and Cox [1994] FLC 92-464

Streets and Streets [1994] FLC 92-509

· means factors: s 66K

resources less commitments

special circumstances

disregard social security

(f) Children Aged Over 18 Years

· prohibition?: s 66L

· exceptions: complete education and/or mental/physical disability

· also note s 66VA

O’Dempsey and O’Dempsey [1990] FLC 92-178

Cosgrove v Cosgrove [1996] FLC 92-700; No. 2 [1996] FLC 92-701

FM v FM [1997] FLC 92-738

Re AM (Adult Child Maintenance) (2006) FLC 93-262

(g) General Powers

· refer s 66P (menu is like s 80)

(h) Urgent orders

· immediate need: s 66Q

(i) Specification in Orders

· identify child maintenance component: s 66R

(j) Modification of Orders

· 66S applies whether order made by court or registered by court

· Order can be discharged, suspended, revived or varied: s 66S(2)

· Can also be modified by consent of all parties

· modification grounds

change in circumstances: s 66S(3)(a)

CPI: s 66S(3)(b)

consent order not proper: s 66S(3)(c)

material fact(s) withheld: s 66S(3)(d)

· Subdivision EA: Varying the Maintenance of Certain Children: s 66SA

(k) Cessation of Order

· turning 18: s 66T

· death: s 66U

· change in circumstances: s 66VA

· adoption etc: s 66V

(l) Parenting Plans

· refer Topic 5 (and note ss 63CAA, 63G)

(2) CHILD SUPPORT (REGISTRATION AND COLLECTION) ACT 1988

· court proceedings were needed

· quantum $ ordered by courts was low

· ‘dead beat dads/moms’

· tax change in the 1980’s

· social security blowout

· 'no child will live in poverty by 1990' pledge!

· scheme introduced in two stages: 1988 and 1989

Deputy Child Support Registrar v Harrison [1996] FLC 92-656

(a) Child Support Agency

· Stage 1

· commenced 1 June 1988

· Australian Taxation Office (now within Department of Human Services)

(b) Registration of Maintenance Liabilities

· Child and spousal maintenance orders must be registered: ss 17, 18

· effect of registration: s 30 debt due to Commonwealth

· can payee enforce? (yes since 2007 see s113A, s113 registrar enforces)

· Opting out for private collection? sis 38A-38B

· Automatic withholding: s 43

· can ‘opt out’: s 44

· employer’s obligations: sis 45-6

(d) Payment and Recovery of Child Support Debts

· penalties: sis 66-69

· deductions from payer’s social security: s 72AA

· transactions to defeat liabilities: s 72C

· registrar may sue: s 113

· enforcement: Family Law Rules

(e) Departure Prohibition orders

§ Pt V Divs 1-7 (ss 72D-72W)

(f) International Collection

§ Child Support (Registration And Collection) (Overseas-Related Maintenance Obligations) Regulations 2000 - now repealed see s124 this Act applies to orders made in foreign countries registered in court

§ s 124A – may make Regulations in relation to overseas-related maintenance obligations

§ see Child Support (Registration and Collection) Regulations , re 3A recricopating jurisdictions

(3) CHILD SUPPORT AND (ASSESSMENT) ACT 1989

· Stage 2

· commenced 1 October 1989

· major changes introduced on 1 July 1999

· assessment by formula (and by reference to taxable income and prescribed amounts)

· new formula commences 1 July 2008

· only concerned with ‘means’ (need is assumed)

· see http://www.csa.gov.au/guide/index.htm

Gyselman and Gyselman [1992] FLC 92-279

Bolton and Bolton [1992] FLC 92-309

Best and Best [1993] FLC 92-418

Reid v Reid [1999] FLC 98-007

(a) Eligible Children

· born on/after 1.10.89 (or full sibling born on/after that date) (relevant where parents never cohabit)

· (or more commonly) where parents ‘separated’ on/after 1.10.89

(b) Applications for Support

· parents may apply: s 25

· non-parent carer application: s 25A

· child cannot apply

· child welfare children? s 26A

· see s 24 (a)- relevant child must be

Ø eligible

Ø under 18 years

Ø not ‘a member of a couple’

· jurisdictional connection to Australia: s24[b) child present in Australia on day of application child Australian citizen or ordinarily resident in Australia on that day. Parent resident reciprocating jurisdiction

· what is the procedure? - apply to Registrar: s 27

· what is a child support period? - refer s 7A(1)

· when does a child support period start? - refer s 7A(2)

· when does a child support period end? - refer s 7A(3)

· examples? - refer s 7A(4)-7A(8)

· new (basic) statutory formula (see below)

· can a payer seek an adjustment to his/her child support income? - yes, see ss 60-64A

· when does a statutory liability cease? - refer ss 12, 31

‘Basic Child Support Figures 2008’ (for formula up to 30 June 2008)

Income cap: 2.5 times EAWE - $113,362.50

Exempt income:

110% unpartnered rate $13,980.20 and no relevant dependent child $15,378.22

220% partnered rate of pension $11,676.60 with relevant dependent child $25,688.52 PLUS

< 13, at end - $2,570

13-15, at end - $3,705

16 or over, at end – NK (in 2006 was $5,307)

Disregarded income: Yearly equivalent EAWE - $45,505

Minimum annual rate of child support: $339

‘Tom and Meng’ example January 2008

(Parkinson Taskforce example using the current ‘basic’ formula that applies until 30 June 2008 and using 2008 figures)

Facts: ‘Tom and Meng’ example is from the Parkinson Child Support Taskforce

· 3 kids all under 12

· Care arrangements – Tom 25% Meng 75%

· CS $Y – Tom: $51,500 Meng: $27,000

· Exempted $ for Tom: $15,378.22

CS% (3/32% multiplied by the following equation:

($51,500.00) LESS [($15,378.22) + ($0)] - ie 32% of $36,121.78 = $11,558.97

Liable parents $Y cap and carer’s $Y level are lower and hence irrelevant

New Formula 2008

New formula new Pt 5 CSAA

· Parental income is now combined after self support deduction new Divs 1-3 CSAA

· Children’s costs calculated by reference to combined parental income (two age bands 0-12, 13+; max 3 children new Div 6 CSAA

· Parent’s shares of costs are allocated according to their respective proportion of total parental income after allowing for their actual care (>14%) that they have new Divs 4-5 CSAA

Cost percentages /
Item / Column 1 % of care / Column 2 Cost % /
1 / 0 to less than 14% / Nil
2 / 14% to less than 35% / 24%
3 / 35% to less than 48% / 25% plus 2% for each percentage point over 35%
4 / 48% to 52% / 50%
5 / more than 52% to 65% / 51% plus 2% for each percentage point over 53%
6 / more than 65% to 86% / 76%
7 / more than 86% to 100% / 100%

· This produces a CS% which is applied to the costs of the child

The new formula looks something like this:

I T C

(parents combined

child support income) (costs of children) (costs of care already met)

%↓ ↓ ↓%

(child support payable)

I Combined parent’s Child Support Income Amount

(CSIA = Adjusted Taxable Income – Self Support Amount)

T Costs of children based on variables

(ie according to I + number and ages of children)

C Percentage costs already met by virtue of care arrangements (% of time for each parent)

$ [Dad’s IT% - C%] + [Mum’s IT% - C%]

Tom and Meng July 2008

(Parkinson Taskforce example using new formula and using figures applicable in 2008)

Facts: ‘Tom and Meng’ example is from the Parkinson Child Support Taskforce

· 3 kids all under 12

· Care arrangements – Tom 25% Meng 75%

· CS $Y – Tom: $51,500 Meng: $27,000

Relevant Self Support figure: $18,252 (1/3 of the ‘MTAWE’)

I $41,996 (Tom’s CSIA is $33,248 + Meng’s CSIA is $8,748)

(ie Tom’s CSIA% is 79.16% and Meng’s % is 20.83%)

T $11,192.68 (based on the ‘Table of Costs’ used by the Taskforce)

C Care – Tom 25% (24%) and Meng 75% (76%)

$ [Tom 55.86% (79.16%-24%)] + [Meng 0% (20.86%-76%]

Tom pays Meng $6,252.23 ($11,192.68 x 55.86%)

Note: Meng does get to keep all the Family Tax Benefit ‘FTB’ (estimated at around $6,184.36 whereas it was previously split between Tom and Meng because he has more than 10% care).

cf. CC Calculator (as at 30 June 2008)

Child Support Estimate: / $515per month
Annually: / $6174
Weekly: / $118

(d) Child Support Agreements

· agreements are encouraged - refer s 4(3)(a) and Part 6 in particular Div 2

· what is included in an agreement? - refer s 84(1)

· formalities? - refer s 85 (a written signed agreement is required)

· procedure for acceptance by registrar? - refer Div 3

· decisions on agreement applications? - refer Div 4

· variation of agreements? - refer ss 97-98, 136

(e) Departure from Administrative Assessment (and role of SSAT)

· review by agency: s 98B

· circumstances: s 98C (like s 117) – ’10 reasons’ see: http://www.csa.gov.au/payer/coa.aspx

· registrar may initiate: ss 98K-98RA

· determinations that may be made: s 98S

· objection procedure and AAT review of certain decisions: see Part 6B

CSA’s ’10 reasons’

Reasons about the children

§ 1: costs applicant more than 5% of his/her CS income amount to have contact

§ 2: costs the applicant extra to cover the children's special needs

§ 3: costs the applicant extra to care for, educate or train the children in the way they intended

§ 4: CS assessment does not take into account the income, earning capacity etc of the children

§ 5: Children, payee or someone else has (or will) received money, goods or property from you for the benefit of the children

§ 6 (payee only): If other parent has sole care of children, and it costs them more than 5 per cent of his/her CS income amount for child care, for children younger than 12 years of age at the start of the CS period.

Reasons about the parents

§ 7: applicant has necessary expenses in supporting him/herself that affects ability to support the children

§ 8: CS assessment does not take into account the income, earning capacity etc, of one/both parents

§ Reasons about a duty to maintain

§ 9: applicant has a legal duty to maintain another person or other children not included in CS assessment, and it costs them:

Ø more than 5 per cent of his/her CS income to have contact with that other person or those children

Ø extra to cover the special needs of that person or those children

Ø extra to cover the necessary expenses of that person or those children.

Reasons about additional income for resident children

§ 10: applicant has earned additional income for the benefit of resident children.

Role of SSAT?

(f) Jurisdiction of Courts: Part 7 CSAA

· Family Court/Fed Mag Court: ss 99-105

· retains some jurisdiction including parentage declarations, applications for a ‘change of assessment’ for a period more than 18 months prior to the date of application, stay orders, enforcement matters sought by the payee, setting aside a child support agreement

· Declaration person entitled to admin assessment (eg eligible carer etc): s 106

· Declaration as to liable parent: s 106A

· Declaration person NOT entitled to admin assessment (eg not a liable parent): s 107

· Power to order the recovery of amounts wrongly paid under the CSAA: s 143(1)-(3A): Where s 107 declaration made court may determine the amount that is to be recovered: s 143(3A). In doing so, the court must have regard to various matters in s 143(3B)

· Issue of deceit? Magill v Magill [2006] HCA 51 (Gleeson CJ, Gummow, Kirby, Hayne, Heydon and Crennan JJ) – ‘majority’ (Gummow, Kirby and Crennan JJ) held that marital representations as to children’s paternity could not give rise to an action in deceit. However, they accepted that a party could seek an order for the repayment of any sums wrongly paid by way of child support (see above) or child maintenance (FLA s 66X)

(g) Orders for Non-Periodic Child Support: Part 7 Div 5 (ss 121-131)

(h) Urgent Orders: Part 7 Div 6 (ss 139-140)